Palm Beach single-family home sales surged in second quarter
Even amid a global pandemic — and by all accounts spurred by it — Palm Beach single-family property sales surged during the second quarter, according to a new round of real estate reports from agencies doing business on the island.
The report from the Corcoran Group highlighted the quarter's single-family sales in the era of COVID-19, the illness caused by the coronavirus.
"Despite COVID-19 hitting 'pause' on many aspects of life and sales activity throughout South Florida, demand for single-family homes in the town of Palm Beach jumped this spring by 21% year-over-year, as primary and secondary homebuyers looked to take advantage of low interest rates amid their search for more space and greater privacy," the Corcoran Report said.
Add those second-quarter single-family sales to the ones that occurred during the three months prior, and the results were record-setting, according to the sales analysis prepared by the Frisbie Team, led by agent Suzanne Frisbie at Premier Estate Properties.
The first half of the year saw the largest mid-year dollar volume on record, with $1.1 billion in closed single-family sales — a vault of 98% over the first six months of 2019, Frisibie's report said.
Condominium and co-op sales, however, didn't fare nearly as well. The reason, at least in part, is because many multifamily buildings and complexes on the island were all but barricaded to outsiders — including real estate agents and their clients — for much of the quarter in response to the health crisis.
The Cocoran Group's analysis showed condo sales townwide dropped 60% year-over-year, the fifth consecutive quarter with an annual decline.
Analyst Jonathan Miller of Miller Samuel in New York also noted the sharp drop in condo sales in his analysis for Douglas Elliman Real Estate.
"After a robust first quarter, the COVID-19 market shutdown during much of the second quarter caused condo sales to see substantial declines," Miller wrote.
And the condo data from Brown Harris Stevens showed a similar pattern, with 67 closed condo sales in the second quarter, compared to 108 sales in the same months last year.
But even with the dip in condo sales volume, average unit-sale price jumped by 30% year over year, while and price buyers paid per square foot rose 31%, Brown Harris Stevens reported. The increase was fueled by 33 sales that broke the $1 million price barrier, according to the report. Those included a $7.676 million sale at 2 N. Breakers Row, a $7 million deal at 217 Brazilian Avenue and a $6.5 million penthouse sale at 3000 S. Ocean Blvd.
Frisbie closely examined condo and co-op sales in Midtown, where prices tend to be higher than on the South End's Condo Row. The quarter ended with the number of signed contracts down 24%, year over year. But Frisbie's analysis shows how the Midtown multifamily market bounced back as the quarter progressed.
There were just two signed contracts for Midtown condos in April, representing an 88% drop over the same month last year, Frisbie reported. But the market recovered sharply in May and June for a cumulative 31 contract signings. June, in fact, saw an 88% increase in contracts signed.
Even with the condo recovery in Midtown, the townwide decline in the number of closed condo deals dampened the overall number of real estate transactions in all housing categories in a year-over-year comparison, the reports agreed.
The various reports use different sales figures and criteria, so apples-to-apples comparisons are difficult. But they do point to overall trends in the market.
The pandemic came to national forefront in March. And by mid-April, residents of states hard hit by the crisis — including New York, Connecticut and New Jersey — had shown they were eager to buy what they viewed as a safer haven in Florida, the reports indicated.
Fueling that interest were other factors, including a remarkably robust stock market and at-home workers who discovered during the crisis that they would do business from almost anywhere, Frisbie's report noted. In addition to areas with high rates of COVID-19, the Frisbie report acknowledged second-quarter buyers came from states with high-taxation states as well as "areas of unrest" and "highly urban centers."
"The combination of these forces has resulted in a surging Palm Beach (single family) real estate market," wrote Frisbie, whose report took note of sales recorded in the multiple listing service as well as off-market transactions.
The latter included two single-family whoppers in June, both changing hands privately. The former Kennedy estate on the oceanfront at 1095 N. Ocean Blvd. sold for a recorded $70 million, while an estate at 8 S. Lake Trail fetched $71.85 million in a deal that set a new lakefront price record. They were the largest sales recorded in the second quarter.
Brown Harris Stevens' analysis took into account those and other private sales, which helped drive the average single-family sales price up, year-over year, by 93% to $12.24 million.
"These two sales, combined with early-quarter momentum, resulted in a boost to the average sale price and the average price per square foot, despite an enduring crisis over the COVID-19 pandemic," the Brown Harris Stevens report showed.
The report issued by Palm Beach office of Sotheby's International Realty solely parsed data from the local multiple listing service and found that the dollar amount of single-family sales in the second quarter more than doubled, topping $412 million. That was a hike from almost $205 million in the same quarter last year.
The average single-family sales price of MLS-listed properties also was up by half, from $6.6 million in April, May and June 2019 to more than $10 million this year, the Sotheby's report said.
Brisk sales in the single-family market took their toll on the number of properties available for sale during the second quarter -- the so-called "inventory" of properties.
Broker Linda R. Olsson of Linda R. Olsson Inc., in the introduction to her sales report noted especially a strong interest in new construction, because "buyers refer anything new and ready for immediate occupancy."
In a section of the Elliman Report examining inventory, Miller took a look at what he calls the "luxury" segment, which included the top 10 percent of the highest priced properties for sale during the quarter. Overall, Miller wrote, luxury listing inventory showed "a substantial drop, as price-trend indicators surged year over year," Miller wrote.
And single-family listing inventory — houses available for sale — fell by the largest rate in seven years of tracking, Miller wrote.
In reviewing his report's second-quarter numbers, Jay Phillip Parker, CEO of Elliman's Florida operations, noted the issues involving inventory.
"Since the shelter-in-place order has been lifted, we have seen the island of Palm Beach's appeal intensify to many domestic buyers," Parker said in a statement released to the Daily News. "As we enter the third quarter there has been a tremendous surge of significant sales, which is clearly attributed to the lack of inventory coupled with the pent up demand for the Island's unique qualities."
Looking ahead, none of the reports specifically addressed concerns about what the recent escalation of coronavirus-related cases in South Florida and the rest of the state might have on the island's market. But several reports did mention the "uncertainty" surrounding market conditions based on fluid conditions involving the pandemic and other issues, including the upcoming presidential election.
For the next month or so, however, the sales picture is likely to remain relatively strong, as properties already under contract close.
"We ended the quarter with more properties under contract than ever before," wrote broker Ava Van de Water, whose regional duties at Brown Harris Stevens include overseeing the Palm Beach office.